I have used the stock ROM, Nookie off the SD and Nookie on eMMC. If you want to use the NC as a reader, I would suggest keeping the stock rooted ROM (although you can install various reader apps to other ROMs) and running Froyo or Honeycomb off the SD (get a high capacity, high class SD).
Since I don't plan to use the NC to read much, I love having Nookie on the internal memory. I have it overclocked, and it is fast enough for most applications. Nookie is still in development, but it is plenty stable for daily use in my opinion. Some apps don't work, and it takes some effort to get it up and running, but all doable with a bit of patience. The soft keys take some getting used to, WIFI refuses to stay active when NC goes to sleep, and some people have to manually shut down mediaserver to avoid wake issues and lag (not a huge effort, but requires some commands after every boot -- my NC used to act up, but I have not had to do this for the last week). I am optimistic that the bugs will continue to get worked out and that this thing can only improve as a tablet. The developer community seems to be fairly active on this device.
The safest and most stable configuration for now seems to be rooted stock and other ROMs off of SD, but I enjoy having Froyo on eMMC and find it plenty stable.